NEWS

Uber drivers in Dewey, other towns told to get license

Jon Offredo
The News Journal
Uber driver Harris Marx of Lewes is shown on Wednesday with the car he drives. The introduction of the ride-hailing service has caused confusion in some communities about whether the vehicles require a business license to operate.

Uber's debut in one of Delaware's hottest beach towns has gotten off to a shaky start.

Shortly after the car-for-hire service launched in the state, officials in Dewey Beach found they had a problem: Keeping the peace.

The service went live and legal in Delaware right when the summer season began, bringing crowds into the community of 338 year-round residents, but also confusion and some fines to Uber drivers.

Cabs and other transportation companies in Dewey pay for a $109 business license from the town, but under the deal struck by the state and company this year, it is unclear if Uber has to pay for a license in Dewey – or any other municipality.

Now, officials are trying to figure out the best way to deal with an upstart car service that's backed by billions of dollars and an army of attorneys and lobbyists nationwide, but still keep a level playing field for the local cab and other transportation companies that are staples of the community.

"We're not really sure what to do," said Marc Appelbaum, Dewey Beach's town administrator.

Rumors swirled of Uber drivers being harassed and bullied by Dewey police who threatened them with fines of $535 for not having local business licenses. Police have issued 18 tickets to drivers, but all were dismissed by the town's alderman, according to town records.

One driver, Harris Marx, has taken his fight with the town public, writing an op-ed in the local paper and meeting with town officials to try and hash things out.

A logo for the ride-hailing service Uber is affixed to the window of Harris Marx’s vehicle. Marx said police in Dewey Beach have told him he needs a business license.

He said he's been repeatedly targeted and harassed by police, who have told him to either get a business license or get out of town. He said that other delivery services, like food delivery, don't have to pay for licenses. Paying for permits in every town would be cost-prohibitive, he said.

"There isn't any municipality that I'm aware of that asks Uber or Lyft drivers to get business licenses," Marx said.

Staci Krause of New Castle said she heard about the issues when she was using Uber in Dewey Beach two weekends ago. She said multiple drivers had told her about the threats to fine.

"This is just silly," she said. "It's crazy town down there. I don't know why."

Uber uses smartphone apps to connect drivers with customers who need rides. Drivers use their own vehicles, and the transaction is booked and processed using the app. There's debate nationally on whether Uber drivers are employees or independent contractors, and there has been concern over public safety and how drivers are regulated. Emerging technologies, like Uber and Lyft, are considered as Transportation Network Companies.

Earlier this year, the Delaware Department of Transportation and Uber drafted a memorandum of understanding, laying down guidelines for Uber to operate in the state. Those guidelines include background check requirements, minimum insurance requirements and prohibitions on drivers soliciting fares outside of train stations and airports.

David Hastings, president of Transit U Inc., which operates the beach's Jolly Trolley, said in an email Thursday that "we believe the TNCs, with these transit apps are truly a great innovation, they just need to be merged/integrated into a format in line with established and time tested safety practices."

He said services like Uber and Lyft also need to be merged into the same regulatory environment as all other public carriers, like cabs, pedicabs and limousines.

In neighboring Rehoboth Beach, City Manager Sharon Lynn said Uber drivers would have to obtain the same $325 business license that cabs have. So far, she said, there have been a few inquiries, but no submitted applications.

"I know they're there," she said of Uber drivers. "But we're not doing anything to take any measures to locate them. It's the honor system. If you're operating here, you need to come in."

Lewes City Manager Paul Eckrich said he wants drivers to get the $125 licenses, but that like in Rehoboth, he would expect people to operate on the honor system. He said he's received only one inquiry.

"We're not going to be sitting outside of the Buttery checking to see if someone has a business license or not," he said. "We would be more reactive than proactive on enforcement, until it became an issue or we received some complaints."

In Dover and Wilmington, city officials are also asking drivers to obtain licenses.

Wilmington officials welcomed Uber with open arms with four controversial, taxpayer-funded billboards, but city officials have said they want drivers to obtain the $60 business license.

Other cities across the country, like Charleston, South Carolina, and Portland, Oregon, also required Uber drivers to get business licenses. In Portland, the license is free. In Charleston, a local ordinance passed by city lawmakers was overridden by statewide legislation passed in June by state officials.

Uber spokeswoman Kaitlin Durkosh said that "dozens of U.S. jurisdictions have created regulations that include a license for the ride-sharing company as a whole – instead of for each individual driver – given many ride-sharing drivers are part-time and use these platforms for supplemental income."

In Dewey, Appelbaum said the town may consider lowering the cost of business licenses to say, $1, for all transportation options. It's not a matter of money, he said.

He said he'd like to get town officials from Dewey, but also other beach towns like Rehoboth and Bethany, together to figure out the best way forward.

Dewey Police Sgt. Cliff Dempsey said officers are contacting Uber drivers, asking them if they have a business license and advising them that they need to obtain one. Currently, 13 Uber drivers have obtained local business licenses.

Appelbaum said he's trying to navigate the waters carefully and not run afoul of Uber and its massive resources.

"The easy answer is, you need to get a license. But I don't want to get some kind of cease and desist from Uber corporate. I don't want to escalate the situation," Appelbaum said.

"It's a whole new world out there. As a municipality, when the dust settles and we're not in the heat of the moment, we need to reflect and figure out what our role and responsibility is and do this in a way that doesn't injure other people."

Reporter Jenna Pizzi contributed to this story.

Contact Jon Offredo at (302) 678-4271, on Twitter @JonOffredo or joffredo@delawareonline.com.